NEBRASKA.

In General.

Nebraska enacted its inheritance tax in 1901. The exemptions apply to each individual share rather than to the estate as a whole, though the language creating the five hundred dollar exemption is ambiguous.

It is a fair construction of the statute that stock in a Nebraska corporation owned by a non-resident is subject to the tax, especially as there is a provision holding the corporation responsible if it transfers stock for a foreign executor before the tax is paid, if it has knowledge that the stock is subject to tax. The tax authorities are not collecting a tax on such stock at present if the certificate is kept outside the state.

The proceeds of the inheritance tax are to be spent for the improvement of county roads.

Constitutional Limitations.

Nebraska Constitution 1875, a. 9.

S. 1. The legislature shall provide such revenue as may be needful, by levying a tax by valuation, so that every person and corporation shall pay a tax in proportion to the value of his, her, or its property and franchises, the value to be ascertained in such manner as the legislature shall direct; and it shall have power to tax pedlers, auctioneers, brokers, hawkers, commission-merchants, showmen, jugglers, inn-keepers, liquor-dealers, toll-bridges, ferries, insurance, telegraph and express interests or business, venders of patents, in such manner as it shall direct by general law, uniform as to the class upon which it operates.

List of Statutes.

1901, c. 54, p. 414.

1905, c. 117, p. 523.

1907, c. 103, p. 356.

1907, c. 104.

1911, c. 107, p. 386.

Compiled Statutes 1905, ss. 5176 to 5196.

THE STATUTE OF 1901.

Nebraska St. 1901, c. 54, p. 414. Approved April 1, 1901.

S. 1. All property, real, personal and mixed which shall pass by will or by the intestate laws of this state from any person who may die seized or possessed of the same while a resident of this state, or, if decedent was not a resident of this state at the time of his death, which property or any part thereof shall be within this state, or any interest therein or income therefrom, which shall be transferred by deed, grant, sale or gift made in contemplation of the death of the grantor, or bargainor or intended to take effect, in possession or enjoyment after such death, to any person or persons or to any body politic or corporate, in trust or otherwise, or by reason thereof any person or body corporate shall become beneficially entitled in possession or expectation to any property or income thereof, shall be and is subject to a tax, at the rate hereinafter specified to be paid to the treasurer of the proper county for the use of the state, and all heirs, legatees and devisees, administrators, executors and trustees shall be liable for any and all such taxes until the same shall have been paid as hereinafter directed. When the beneficial interests to any property or income therefrom shall pass to or for the use of any father, mother, husband, wife, child, brother, sister, wife or widow of the son, or husband of the daughter, or any child or children adopted as such in conformity with the laws of the state of Nebraska, or to any person to whom the deceased for not less than ten years prior to death stood in the acknowledged relation of a parent, or to any lineal descendant born in lawful wedlock, in every such case the rate of tax shall be one dollar on every one hundred dollars of the clear market value of such property received by each person, and at the same rate for every less amount; provided, that any estate which may be valued at a less sum than ten thousand dollars shall not be subject to any such duty or the taxes, and the taxes to be levied in the above case only upon the excess of ten thousand dollars received by each person; when the beneficial interests to any property or income therefrom shall pass to or for the use of any uncle, aunt, niece, nephew or other lineal descendant of the same, in every such case the rate of such tax shall be two dollars on every one hundred dollars of the clear market value of such property received by each person on the excess of two thousand dollars so received by each person; In all other cases the rate shall be as follows: on each and every hundred dollars of the clear market value of all property and at the same rate for any less amount, two dollars; on all estates of ten thousand dollars and less, three dollars; on all estates of over ten thousand dollars not exceeding twenty thousand dollars, four dollars; on all estates of over twenty thousand dollars and not exceeding fifty thousand dollars, five dollars; and on all estates over fifty thousand dollars, six dollars; provided that an estate in the above case which may be valued at a sum less than five hundred dollars shall not be subject to any duty or tax.

S. 2 provides for taxation of remainder interests.

S. 3 provides that taxes imposed shall be due and payable at the death of the decedent.

S. 4 covers the assessment and collection of the tax.

THE AMENDMENTS OF 1905.

Neb. St. 1905, c. 117, s. 1.

S. 1. Sections amended.

Approved March 8, 1905.

That sections 10706, 10711, 10713, 10715 and 10724 respectively of Cobbey's Annotated Statutes for 1903 be amended to read as follows:

S. 10706. Inheritance tax. - Rate. All property, real, personal and mixed which shall pass by will or by the intestate laws of this state from any person who may die seized or possessed of the same while a resident of this state, or, if decedent was not a resident of this state at the time of his death, which property or any part thereof shall be within this state, or any interest therein or income therefrom which shall be transferred by deed, grant, sale or gift made in contemplation of the death of the grantor or bargainor or intended to take effect, in possession or enjoyment after such death, to any person or persons or to any body politic or corporate, in trust or otherwise, or by reason thereof any person or body corporate shall become beneficially entitled in possession or expectation to any property or income thereof, shall be and is subject to a tax at the rate hereafter specified to be paid to the treasurer of the proper county for the use of a permanent road fund as hereinafter provided, and all heirs, legatees, devisees administrators, executors and trustees shall be liable for any and all such taxes until the same shall have been paid as hereafter directed. When the beneficial interest to any property or income therefrom shall pass to or for the use of any father, mother, husband, wife, child, brother, sister, wife or widow of the son, or husband of the daughter, or any child or children adopted as such and conformative with the laws of the state of Nebraska, or to any person to whom the deceased for not less than ten years prior to death stood in the acknowledged relation of a parent, or to any lineal descendant born in lawful wedlock, in every such case the rate of tax shall be one dollar on every one hundred dollars of the clear market value of such property received by each person, and at the same rate for less amount; provided, that any estate which may be valued at a less sum than ten thousand dollars shall not be subject to any such duty or the taxes, and the taxes to be levied in the above case only upon the excess of ten thousand dollars received by each person; when the beneficial interest to any property or income therefrom shall pass to or from the use of any uncle, aunt, niece, nephew, or other lineal descendant of the same, in every such case the rate of such tax shall be two dollars on every one hundred dollars of the clear market value of such property received by each person on the excess of two thousand dollars so received by each person. In all other cases the rate shall be as follows: On each and every one hundred dollars of the clear market value of all property and at the same rate for any less amount, two dollars; on all estates of ten thousand dollars and less, three dollars; on all estates of over ten thousand dollars and not exceeding twenty thousand dollars, four dollars; on all estates of over twenty thousand dollars and not exceeding fifty thousand dollars, five dollars; and on all estates over fifty thousand dollars, six dollars; provided that an estate in the above case which may be valued at a sum less than five hundred dollars shall not be subject to any duty or tax

Nature of Tax.

This act is a tax upon the right to succession to property, that is, upon the right to receive the property from the estate of the decedent and not upon the estate itself. State v. Vinsonhaler, 74 Neb. 675, 105 N. W. 472.

Certainty.

The court does not decide whether some clause or clauses of the act of 1901 as amended in 1905, are void for uncertainty. State v. Vinsonhaler, 74 Neb. 675, 105 N. W. 472.

Tax is on each Beneficiary and is Uniform.

The act of 1901, as amended in 1905, in that part of the section beginning with the words "in all other cases," in some instances requires the tax to be levied upon the whole estate and it was therefore argued that this is a tax upon property, and not being uniform was therefore unconstitutional. For the purposes of this taxation the estates seem to be classified according to their value, but it does not follow that the tax is placed upon the property constituting the gross estate of the decedent. The tax is placed upon the estate received by each heir or devisee, and its rate is uniform as to its class, and this classification is reasonable and within the province of the legislature. State v. Vinsonhaler, 74 Neb. 675, 105 N. W. 472, 474.

Double Taxation Upheld.

It was argued that as the beneficiaries had paid one inheritance tax in New York, equity and good conscience dictated that a second burden should not be laid in Nebraska. The court remarks that "the question presented is not one of general equities, but of jurisdiction. It has been held, and logically, that the taxing authorities must be controlled solely by the laws of the state, and not by proceedings in another and distinct jurisdiction, to ascertain whether or not a certain tax should be levied or collected. Payment in one state is not a defence when called upon to pay in the other unless so provided by law. Mann v. Carter, 74 N. H. 345, 68 A. 130, 15 L. R. A. (N. S.) 150, Blackstone v. Miller, 188 U. S. 189, 206, 207, 23 Sup. Ct. 277, 47 L. Ed. 439." Per Root, J., in In re Douglas County, 84 Neb. 506, 121 N. W. 593.

Stock of Non-Resident Trustee.

The testator had in 1905 executed a certain trust agreement by which he conveyed all his property by voluntary deed to a trustee, a resident of New York City, who took actual possession of the securities at that time and transferred them to New York, where they did after that remain. The securities have been kept intact and the dividends paid to the testator during his life. The court holds that for the purposes of taxation the shares in the stock of a Nebraska corporation were within the state of Nebraska and therefore subject to the inheritance tax. It further appeared that the deed provided that the settlor reserved the right to limit in his will the terms upon which the beneficiaries might enjoy his bounty and if he did make his will then devolution of the property was subject to the laws of Nebraska and subject to its inheritance tax. In re Douglas County, 84 Neb. 506, 121 N. W. 593.

S. 10711. Same. — Payment. — Time. Every sum of money retained by any executor, administrator or trustee or paid into his hands for any tax on any property shall be paid by him within thirty days thereafter to the treasurer of the proper county, and the said treasurer or treasurers shall give and every executor, administrator or trustee shall take a receipt from him of said payments. The words "proper county" shall be taken to mean the county in which the property was situated and subject to taxation at the time of the death of the owner.

S. 10713. Refund of tax. Whenever debts shall be proved against the estate of the deceased after distribution of legacies from which the inheritance tax had been deducted in compliance with this act, and the legatee is required to refund any portion of the legacy, a proportion of the said tax shall be paid to him by the executor or administrator, if the said tax has not been paid into the county treasury or by the county treasurer if it has been so paid.

S. 10715. When any amount of the said tax shall have been paid erroneously to the county treasurer it shall be lawful for him, on satisfactory proof rendered to him of said erroneous payment, to refund and pay to the executor, administrator or trustee, person or persons who have paid any such tax in error the amount of such tax so paid provided that all applications for the repayment of the said tax shall be made within two years of the date of said payment.

Neb. St. 1905, c. 117, approved March 8, 1901, amended Neb. St. 1901, c. 54, (Cobbey's Annotated Statutes, section 10724), by appropriating the inheritance tax to a permanent road fund.

AMENDMENTS IN 1907.

Neb. St. 1907, c. 103, approved April 6, 1907, amends Cobbey's Annotated Statutes, section 10706, to read as printed post, p. 712, section 5176 of the present act.

Neb. St. 1907, c. 104, approved March 18, 1907, amends Cobbey's Annotated Statues, sections 10724, 10716, to read as printed post, pp. 714, 716, sections 5186 and 5194 of the present act.